Contracts
A Massachusetts residential P&S is signed but the property burns down before closing. Under the common law doctrine of equitable conversion, who bears the risk of loss?
AThe seller, since they still hold title
BThe buyer, since equitable title passed to them upon signing✓ Correct
CThe buyer's lender, since the mortgage is at risk
DThe risk is split equally between buyer and seller
Explanation
Under the common law doctrine of equitable conversion applied in Massachusetts, once a binding P&S is signed, equitable title passes to the buyer. The buyer bears the risk of loss unless the contract provides otherwise. Massachusetts practice recommends that buyers obtain insurance immediately upon signing the P&S.
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